90,000 jobs shaken by energy policy instability

“If we are to inject confidence into the economy, we need stability. Investors demand it,” Lord heseltine said yesterday: “For the country’s energy needs to be met, the Government needs a clear and consistent long term energy policy that indicates what our projected needs will be and how they will be met, by when and by whom.” Stability? The coalition threw the solar power industry, mishandling its feed in tariff, risking 20,000 jobs.The installation industry predicts 16,000 job losses as government schemes were cut. Now, the Energy Minister has rocked the wind power industry. But what about the industry’s 5,490 companies and their 55,000 employees?

Aside from the politics, what of the economic and employment issues at stake? The wind industry was worth £14bn in sales in 2010-2011, a 7.2% growth rate on the previous year. The latest BIS report on the green economy shows that the sector’s 5,490 companies employ 94,157 staff. Job numbers grew by 3.2% in 2010-2011.

As Lord Heseltine rightly pointed out yesterday, renewable energy employment is well distributed across the UK and contributes to greater equality of regional growth. “During a trip to the Humber I heard from everyone I met the importance to the region of investment in offshore wind.”

Wind exports were worth £17bn, or over a tenth of the entire export value of the UK’s low carbon industries and services. Key export markets include China, Malaysia and South Korea. Sales are forecast to increase by an average of 7% annually through to 2015.

Onshore wind is one of the cheapest low carbon energy technologies. Secure, proven and quick-to-build, it is essential in meeting our renewable energy targets and carbon reduction objectives cost-effectively. Onshore wind now contributes over 27% of renewable power generation.

In May 2011 Charles Hendry MP, the former Minister for Energy and Climate Change officially opened Mabey Bridge’s £38 million state-of-the-art wind turbine tower manufacturing facility in Chepstow. The company funded the investment in full and has created 197 skilled jobs in the South Wales region to date. Since signing a preferred supplier agreement with REpower, one of the UK’s biggest suppliers of wind energy, it has entered into a number of further supply agreements with other major wind turbine manufacturers and Mabey’s towers have now been delivered and installed at a number of wind farm sites across the UK.

Hendry was quoted by the Times as saying that renewables were critical to the UK’s future energy security and that it was essential for ministers to maintain “constructive engagement” with the industry.

Meanwhile, a government spokesman said the energy minister still had the full support of the prime minister. But Cameron suggested that a review of local communities’ acceptance of windfarms, which includes the cost of the technology, could trigger a rethink of government support once the 2020 target was met. In investment terms 2020 is the short term for multi-million projects.

A better idea would have been for the PM to declare an extension of our renewable energy targets to 2030, including a carbon target for the delayed Energy Bill. This “policy stabiliser” will unloock investment in the big wind manufacturing jobs in the North East and elsewhere.

Written by Philip Pearson

Philip is a former Senior Policy Officer in the TUC’s Economic & Social Affairs Department, working on issues around climate change, energy and transport.